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The Communicators

News/Business. People who shape the digital future.

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00:30:00

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Annapolis, MD, USA

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Comcast Cable

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Channel 81 (567 MHz)

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mpeg2video

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ac3

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704

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480

TOPIC FREQUENCY

Us 5, Linda Woolley 4, Google 3, Baucher 2, Stearns 1, Mr. Chester 1, Neurofocus 1, United States 1, Ftc 1, Dma 1, Comcast 1, Jeff Chester 1, Barton 1, U.s. 1, Youtube 1, Auctioning Us 1, America 1, Haverhill 1, Verizon 1, Malawi 1,
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  CSPAN    The Communicators    News/Business. People who  
   shape the digital future.  

    September 25, 2010
    6:30 - 7:00pm EDT  

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it is now called consumer choice, and if you go to www.dmaconsumerchoice.org, and that is still an opt out program for mail, and in some ways, it is unfortunate that this interview is this week and not a couple of weeks from now because we are in the process with other advertising associations of launching the next prong of our self-regulatory program, which has to do with interface ads on the internet. i think i mentioned to you that i was watching one of your earlier shows, and one of the things mentioned was that the ftc is keenly interested in having some sort of symbol where consumers can see the symbol and know what it means and have
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confidence that they can make choices about ads, and that is exactly what the next phase of the self-regulatory program is going to do. we will be launching an icon, which will appear on third- party-delivered ads on the internet. when consumers get familiar with it, they will be able to see it and know what it means. it means you are being delivered interface acts, and with one or possibly two, but typically one click, you will be able to exercise choices. >> when it comes to wireless, we are all about apps these days. this is an app for "usa today," but it says that this application has access to the following -- your location, storage, network communication, which is full internet access to
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my phone, and phone calls. it can read phone state and identity. that could frighten some people. if they want to get news from "usa today" or purchased something on amazon. why is it necessary that amazon or any other advertiser know the phone calls being made from this phone? >> i agree with you entirely that that could frighten someone, and that is one of the most important tenets of self regulation, the whole idea of transparency, that consumers have to know what is going on, and they have to be able to make choices. i think what has happened with the internet, and you raise the issue of a phone -- marketing is migrating more and more to mobile devices, whether phones or ipads or whatever kind of mobile devices.
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there are new rules of the road, new guidelines that will have to be issued for those kinds of things. one of the things that dma just did in the last quarter was we updated our mobile marketing guidelines. again, our guidelines can w be can www.dmaresponsibility.org. because we have so many members, are guidelines wind up being the best practices for marketers. when you become a member, you have to sign on your application that you will follow our guidelines about marketing. what is good marketing practice. part of that is notice and choice for consumers. >> you mentioned notice and choice, and you live in the consumer choice you have had available for snail mail. -- you mentioned consumer
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choice where you can opt out of getting unsolicited mail. what are you doing to make sure consumers know about these choices and are taking actions they might want to take? >> i'm sorry to hear you did not know about this. we launched a couple of years ago now, and we did a lot of press and around it, including advertisements. somebody from our new york office was on "good morning america." especially since you are in the tech world, clearly, we have more work to do to make sure consumers know about that, but on the new stuff, on online advertising, we are planning on having a series of webinars, which we have mapped out, scripted, and we have the dates for, and we are planning to do a
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whole consumer education program about it. one of our sister organizations called the internet their -- interactive advertising bureau, recently did a public campaign on the internet, which you may have seen called -- i do not know what it was called, but the ad said, "ads are creepy" or something was creepy. the number of people who clicked on those ads was dramatically higher than the usual number for a public-service announcement, and i think it goes to your point of consumers want to know what is going on. they want to know why they got this bad. they want to know what kind of data is being corrected, and those kinds of public service announcements go a long way to
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explain that kind of thing, and that is our hope with the icon, that will further what consumers no. >> since we referenced it, let me ask you about the idea of the haverhill advertising, which is tracking web activity so you can target ads at consumers. how important is that for your industry? -- behavioral advertising. >> it is tremendously important. one of the things with direct marketing -- i have to tell you, the direct marketing association has been around for 90-plus years. this is not a new phenomenon. we are talking about it, really, online and with mobile applications, but direct marketing with mail or any other kinds of things has been around for a long time. the tenets of direct marketing are you need data about a
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potential consumer, and you need analytics. that is what differentiates direct marketing from advertising. that is what differentiates it from what you see on the side of a bus that is not targeted to you as an individual or me as an individual. it is a different thing. i know we all have a tendency to lump advertising and direct marketing together. they really are different. >> again, going back to your interview with david, one of the things he said was that consumers have to understand that information and personal information is a commodity, and that is true. that is absolutely positively true, and it has been true for the last 100 years because that is what direct marketers do. that is what makes them so much more effective than the ad on the side of the bus. that said, if we know that
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information is a commodity and that is what direct marketers to, then we still get back to the point that consumers have to be comfortable with it, and that is where our self regulation program and our guidelines and what not, and -- come in because again, you do not want to make consumers angry. you want to make them happy and purchase things. >> how would the new bill affect your business? >> one of the things we have to be careful about with voucher and stearns or anything that comes down the pike is right now the internet is a huge economic driver in general, but in terms of direct marketing, it is a tremendous economic driver, both in terms of employment, and consumer sales, and economic growth.
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some of these proposals could have a dramatic effect on the direct marketing industry. the other thing we have to remember about the internet being an economic driver is the internet is free. it is a tremendous amount of content available on the internet, whether it is -- you mentioned sports scores or checking stock prices or doing a global search -- who will -- google search on a rare thing or buying things from each day -- from ebay. a child in malawi with a $100 computer has access to the world now. it is really quite remarkable. the reason they do is because of the economic model. all of this is supported by ads.
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if you do not have the ad revenue to support that, then you have to do something else. the something else typically is paying for content, and i'm not sure that is where consumers want to go. >> in order to access amazon's app on my telephone, and i have to allow them access to my phone records and my internet searches? >> i think we need to -- i do not disagree that maybe some limits have to be put a round things -- around things. one of the things that dma is very much against -- i have heard that other speakers have talked occasionally about things that are persistent, things like flash cookies or -- as
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distinguished from regular cookies, that consumers cannot necessarily get rid of all cannot change browser settings to get rid of. we would oppose using those for marketing purposes. there might be reasons to use those technologies to deliver something to you like a movie or tv show or game or something that is more interactive, but that is different from collecting information and using it for marketing for offices, and we would oppose the use of persistent technologies for marketing purposes. >> you said that the baucher and stearns draft bill would have a dramatic effect on your industry. can you give more detail about what you do not like and what you do like about your bill? i know that privacy advocates do not think it goes nearly far enough, and it is true -- too industry-friendly. >> we would not describe the bill as industry-friendly.
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the kinds of things we do not like about it -- we think is much too broad and a lot of the definitions are very broad. there are things that i think everyone would agree have been defined many times over by other laws as personally identifiable useful information, like social security numbers, but there are other things considered personally of verifiable information like your postal address. going back to what i said about the legacy of direct marketing, we would not consider your postal address as personally identifiable. that would really be a sore spot. there are a lot of restrictions on transferring data to a third party. it is not just transferring data to a third party for the purpose of marketing, but it is also transferring data to a third party for analytics. if you are a large retailer, and
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you want to analyze the data of your consumers, typically, that is done by somebody else, so there are restrictions on being able to do that. again, without getting too much into the weeds, that is an example. >> a lot of people would say that the web gives you an ability to aggregate so much types of data about a person. do you think there should be any privacy protection super mandated by law -- projections mandated by law? >> i think congress has done well so far limiting the kinds of things they do not want use or aggregated. personal health information, financial health information. there are all kinds of limits on marketing to children. the most important thing from the point of view of markers, the point of view of the direct marketing association, is really that marketing information only be used for marketing purposes,
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and it should not be used for government surveillance. it should not be used for scoping out tax evaders. it should not be used for anti- terrorist activities. it should not be used for employment information. it should only be used for marketing. i would like to really draw the distinction between personal and private. there is lots of information like health information that i think we would all agree is private. financial information is private. personal i would say is something that is tailored to me. it is not personal like i did not want anyone to know. it is specific to me. it is the kind of car you drive. the people you carvel with no the car you drive. it is not private. -- the people you carpool with. that is the distinction to be made. the direct marketing association
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-- we are pretty much 50/50 in terms of suppliers, companies you probably have never heard of that are involved in the process of getting a message or offer to you, and the other 50% of -- are -- think of some of the major corporations in the united states that advertised. financial service providers, consumer services. they are all members of dma. >> linda woolley is the executive vice president for government affairs of the direct marketing association. next, geoff chester of the center for digital democracy. -- jeff chester. mr. chester, we just talked with linda woolley of the direct marketing association. s she stearns, baucher, the draft legislative proposal is not industry-friendly.
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do you agree? >> consumers need to be protected when they go on line. they face a far reaching did a correction system that is tracking them wherever they go, watching them behind the scenes -- data collection system. it is like someone shadowing it, writing everything down, what restaurants you go to, what your child does. all of this is compiled. none of this is transparent. what americans need is an internet where they are assured that they know what information is collected, how it is used, and they have to agree on the most critical things involving their lives, their finances, their health, their children, their politics. they decide what is collected and how it is used. all that stearns and baucher would do would be to provide additional safeguards for consumers. the idea that the internet as we know it is going to go bankrupt,
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that they are going to have to shut down, if we protect consumers online when they engage in transactions and protect their privacy is absurd and frankly disingenuous. we can have a robust economy and have privacy. we need to measure consumer privacy if we are going to have the kind of robust internet online. >> you are saying the stearns baucher approach is not enough? >> what we really need is a system where consumers are told how the system works, what is being collected, how it is used, and give them much more choice. the online advertising industry is incredibly innovative. they have created an amazing data collection and tracking system where they can use their ingenuity to come up with a way to help consumers understand when i'm applying for a mortgage on line, looking at a drug company website, when my kid is on facebook, what is really happening? what do i need to know, and what
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choice do i have? we want to see much more of this information under the control of the individual. we should not have a democracy where we allow anyone, whether it is companies, or governments to collect massive amounts of information about us individually and be able to use that information to target us, whether it is our computer or using a cell phone or playing a video game. they are targeting us with powerful advertising and other messages designed to suit their interests, not necessarily hours. >> some have opposed the idea of a do not track list. is that something that is feasible? is that something you would favor? >> we should have the list because they do not call list shows this can work. tens of billions of people signed up. they did not want to be bothered any more. the problem is far beyond just
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do not track. the missing link is about the power of the online tracking system. this is advertising and marketing like you have never seen it before. this is about collecting information about you as an individual, being able to track you wherever you are, and taking that information and transforming it in real time to influence you and target you, and they develop a host of ways to collect this data without it being transparent. the other part of the problem is insuring that advertisers and marketers disclose to you what information is being collected and how it is done. give us some control. increasingly, online advertisers are creating the ads to directly influence our subconscious mind, and i know it sounds like a kind of science fiction story, but that is true.
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the system that online advertisers have created is one that i think raises fundamental questions about the future of the online system. it is about collecting information about you as an individual, being able to track you, influence you, and increasingly designing ads and messages to work on your subconscious. neurofocus is an example of a company doing that, and people can go on to their website and look. we need to have the government, and create some their rules of the road. >> you say the fcc has not done enough to rein in online marketers. they say it is not within their scope, they do not have the rulemaking authority they need to go after some of these people. >> of course, lobbying organizations have successfully convinced congress recently to move out of the legislation, the
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provision that would have given the federal trade commission more power. online advertisers, direct marketers qualify, but the problem is that even under this administration, the federal trade commission is behind the times, not doing enough to protect consumers. they have a privacy division and an advertising division. the advertising division is still looking at the problem like it was in 1970. it is the 21st century, and until the ftc wakes up from its perpetual slumber, we are at risk. >> at what point do the advertisers have some rights? >> we want to see online advertising drive, and they do have rights, but what we want is some kind of transparency and accountability, and when it comes, -- for me, when it comes to the areas that really affect us the most -- at my organization, we have been looking at online advertising
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and financial marketing and the system they have created to track people when they apply for a mortgage or a credit card. this was even on the market was today. or when you go to a pharmaceutical website and you are getting drug information. or looking for example at youtube. all this information is being collected. people are being tracked. they are encouraged to do one thing or another. none of this is clear. none of this is transparent. we should not have all but is happening behind a closed screen, so to speak. what we want advertisers to do is be honest. i know it may sound like an oxymoron -- truth in advertising -- but in fact the advertisers need to disclose what they have created. we need congress to force them to do so, and we can proceed with a system that is honest, candid, and that tells individuals what their choices are. >> how would that work in real time on the internet? what about the idea of the icon
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that consumers could click on that linda woolley talked about? >> i think we can come up with a way that this can work. when that icon popped up, it needs to say that they are tracking you. today, part of the system includes auctioning us off, auctioning us off in real time on these real-time at exchanges. in other words, when they placed a cookie on your web browser, right, they get information on what you are interested in, and they auction the right to target you. even when your on the street and you are near one location compared to another. do we really want to have a system like that? they need to disclose what they are doing, and when it comes to the kinds of applications and services that are most important in our lives, finance and health
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and young people, there are some things that advertisers should not do. >> linda woolley has been quoted as saying that to develop tools to allow consumers to view and edit their profiles is a good idea, but it will take a while for advertisers to develop these tools. >> i'm afraid i do not agree. the advertising agency globally is growing, and u.s. companies are in the lead. they create on a daily basis new ways to create -- collect profile information from consumers, and that information is going on because the name of the game in advertising today, and that is what people really need to understand. it is not an ad delivered to 1 million people, 5 million people, 1000 people. it is delivered to you personally. they can come up with ways of allowing an individual to edit their profile. we think they can do that soon,
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and we want the ftc and congress to do so. >> of our firms like google and -- are firms like google and yahoo! doing that? >> those companies are allowing people to shed some of their profile information, but even that does not inform consumers about the process. google owns a number of companies, one of which takes the data about you and changes the copy immediately based on your latest interests and concerns. the companies need to give consumers all the tools they need to control their profile. >> what about the isp's like cox or comcast or verizon? they have access to all this information, every click on your computer, every television show that you watch, correct? are they part of the baucher and stearns legislation?
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>> they are covered in the bill, but -- it is called deep packet inspection, where the company that is your isp is able to get a 24/7 view of everything you did, including your television. in an ideal world, we would not allow that to happen, but the fact of the world's online advertising is a basic business model. we need to impose real safeguards, but we should try to stop this kind of surveillance from your isp about everything that you do. remember, it is not just what you were watching on tv or online, but it is increasingly where you get your cell phone as well. >> is anybody doing -- this issue came up, i want to say last year, before congress, and there was one company that had proposed it at the time. >> privacy groups brought up the
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problem two years ago or three years ago perhaps when charter cable wanted to do this, and it shows you that protecting privacy is a bipartisan issue because two congressman work together and have been raising the alarm to prevent this kind of 24/7 surveillance from emerging. every day, that is what we track. everyday they are creating new ways to track and profile and target us. what they are already able to do with a mobile phone is frankly alarming because they know this device is yours and they know where it is in the street, and i'm sure you are aware of what they call location targeting where they are finding ways to get you into the store as you walk by the store. your phone will jiggle can you get a discount. all this is being collected, and the government is behind the times. we need to see some real regulation. we need to see the advertising
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industry come to the table and work with consumer advocates. >> you can turn off the gps on your phone. what would be the argument against getting a discount against the store you are in front of? >> of course you get the informational -- of course you can get the information. but do you know if they have sold that information? that is part of the problem, that a huge industry has developed under the nose of the government. the government is behind the times. it involves not only our privacy, but our own personal deep interest. we will be using the mobile phone to apply for a loan. we will be using it to apply for a doctor's appointment. all this is used without the awareness and consent of the
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consumer. that is not the direction we want the country and the market place to go. >> as congress changes hands after the november elections and republicans take over the house, do you think privacy will remain an issue that congress will tackle? you mentioned congressman barton, who could become the chairman of the house energy and commerce committee, or not, but what do you see happening on this issue next year? >> i do think it is a bipartisan issue. they are deeply disturbed about the system. the question is what kind of legislative approach would they take. the trade commission is going to issue a new proposal in the next few weeks as well. i do think this is an issue that is boiling over. the time is right for some action. what is going to force congres'' hand is that we see on a daily basis headlines this kind of data was